question 9
Exam 2 FINC3310 Principles of Financial Management Brooklyn College Kopp When we calculate (a.NP Koppelman School of Business HJ. Abraham Lin We calculate ( a. NPV b. IRRC MIRR d. Pl), we input cash flows and initial cash outlay only. The required the required rate of return is used in making decisions, not in calculation. 2. Which of the followina do NOT consider the concept of time value of money? a. NPV b. IRR C. payback period d. Ple. MIRR 3. Which of the followings bears lowest risk? a. US treasury bills b. Big company long term bonds c. Big company stocks d. small company stocks e. small company long term bonds 4. Systematic risk of each company is a diversifiable. b. measured by beta in CAPM. c.asset specific d. defined by the risk free rate. 5. In the calculation of Cash Flow From Assets (CFFA) via the Indirect method in the capital budgeting, which of the followings reduces CFFA? a. Decrease in Net Working Capital b. Depreciation Expenses . Increase in the Net Capital Spending d. Increase in the residual value of the assets. 6. In an efficient capital market a. Nobody can make profit in the markets b. Wrong doing in investment will not lead to a loss. The past history shows the capital markets were in the strong form efficiency d. The securities are fairly priced based on their corresponding risks. e. There will be no surprise in the market. la capital budgeting, which of the measures represents the benefits to contrat (a. NPV b. RR C. MURR d.PL owing best describes this project? A project has a net present value ofrere. Which one of the following best de a) The project has a zero percent rate of return b) The project requires no initial cash investment c) The project has no cash flows d] The summation of all of the project's cash flows is er e) The project's cash inflows equalis cash outflowsh 's cash inflows equal its cash outflows a current dollar terms 20.00 Year Of 92,330 9. You are reviewing a new project and have estimated the follow Year OF-170,000 Year 1 0 64,12eard 0.800 Year of the required rate of return is 12%, calculate a. 17 d. 9.5 c118 d. 15.0 16 %
